Stockton Road Capital, a fundless sponsor based in New York, recently announced its first deal, a co-investment alongside GF Capital for the buyout of Airborne Health, a nutritional supplements business previously owned by Summit Partners. The deal was a troubled one for Summit Partners: Last year the company lost access to a revolving credit line after busting through covenants on its debt. The company also agreed to pay $23.3 million as part of a settlement of a class-action lawsuit that accused the company of exaggerating the effectiveness of its products.
Stockton Road Capital was founded six months ago by Joe Rhodes, a former partner with Charterhouse Capital. Rhodes said he plans to continue to seek co-investment deals, using capital from a network of investors. He founded the company six months ago and said he would entertain the idea of raising a traditional fund in an improved fundraising environment.
Emerging UnscathedThe New York Times took Thomas H. Lee Partners to task this month for doing the deal equivalent of winning a race, jumping out of the car, then watching the car burst into flames. But some digging by sister publication peHub.com finds that Simmons Bedding Company is far from the only company to file bankruptcy after the buyout firm that owned it managed to secure a profit. Others to have secured a profit for their owners before imploding include JG Wentworth, backed by JLL Partners; Eurofresh, backed by Bruckmann Rosser Sherrill & Co.; United Subcontractors, backed by Wind Point Partners; Anchor Blue, backed by Sun Capital Partners; and Mervyns, backed by the combo of Cerberus (which profited) and Sun Capital Partners (which did not).
Still HereWetherly Capital Group is trying to weather the storm, according to sister publication peHub.com. Ex-employee Julio Ramirez may be among those who have pled guilty in the ongoing pay-to-play scandal involving the New York State employee pension fund, but the Los Angeles-based placement agency plans to stay in business. It has its eye on providing advice to firms on fund marketing, such as their PPM and collateral marketing material, but is expected to avoid making actual introductions with investors.